Continental Resources Inc. swung to a first-quarter loss as oil prices crashed amid an “unprecedented market environment” caused by the COVID-19 pandemic.
The Oklahoma City-based oil explorer founded by Harold Hamm lost $185.7 million, or 51 cents a share, as revenue plunged 22 percent from a year ago to $880.8 million, exceeding the $862.9 million that analysts surveyed by Reinfitiv were anticipating. The adjusted loss of 8 cents a share missed the 3-cent loss that was expected.
At the end of the first quarter, Continental had $517.6 million cash.
PLUNGING OIL PRICES, CORONAVIRUS FUEL BUDGET CRISIS IN PETROLEUM-RICH ALASKA
“Our first quarter results underscore the capital efficient and low cost nature of our assets," CEO Bill Barry said in a statement. "Continental is financially strong with ample liquidity and no imminent debt maturities.”
Oil prices crashed 67 percent in the three months through March as stay-at-home orders aimed at slowing the spread of COVID-19 reduced global crude demand by 30 million barrels per day at the same time a price war broke out between Russia and Saudi Arabia, two of the world's largest producers.
As demand dropped, Continental's production increased by 9 percent from a year ago to 360,841 barrels of oil equivalent per day. Oil production was up 3 percent to an average of 200,671 barrels per day while natural gas output increased 16 percent to 961 million cubic feet per day.
Continental voluntarily reduced oil production by 70 percent in May.
Property impairments rose to $222.5 million in the first quarter, up from $25.3 million a year ago, as a result of the sharp drop in commodity prices. Continental also took a $24.5 million impairment on the value of its crude oil inventory. The company withdrew its 2020 guidance due to uncertain market conditions and will provide a new forecast at the appropriate time.
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Continental shares were down 56 percent this year through Friday, lagging the S&P 500's 9.3 percent loss.